Wirral Council said it will continue to support progress at Wirral Waters
The Hythe(Image: Google Street View)
Wirral Council has had to buy a Wirral Waters office block for nearly £5m. The local authority said it showed its commitment to attracting investment in to the area.
The Hythe, a Wirral Waters office block on Tower Road, was completed at the end of 2021 and secured its first tenant in 2022. It was the first Grade A office building to be developed on the Wirral for over a decade and overlooks the Birkenhead docks.
The building has now been bought as part of an existing agreement with Peel, the landowner of the docks, and its understood Peel Waters has no involvement in the operation of the building going forward.
The ground floor of the building is currently unoccupied and £250,000 of costs related to the building are being covered by a council-linked company’s profits.
The building was acquired earlier this year. A Wirral Council spokesperson said: “Wirral Waters is one of the largest and most significant regeneration schemes not just in this region but nationally and its success is a vital element of the wider efforts to deliver new homes and promote growth and prosperity for our borough, and the development of the Hythe offices is integral to that.
“The Council will do all it can to support progress across the Wirral Waters site and this agreement with Peel is another illustration of the commitment to attracting new inward investment and jobs to Wirral.”
In 2018, Peel L&P approached Wirral Council to ask them to share the commercial risk of constructing the building. This is because at the time it would have been commercially unviable even with the help of a £3m grant from the Liverpool City Region Combined Authority.
The council then entered into what is called a Put and Call option. The agreement meant three years after the completion of the development, Peel could require the council to buy a 250 year leasehold for the site.
However if the value of the building went above £4.985m before then, the council could make Peel sell the property for that amount.
The value of the building was £3.9m in 2022 and in 2023 it was £3.45m. The building was valued again in 2024 but Wirral Council has not confirmed how much the building is currently worth.
A report last year said if Peel triggered its option, the council would have to buy the Hythe for £4.985m which would be covered by borrowing. This would cost the council’s services a total of £350,000 a year for 50 years.
Richard Mawdsley, director of development for Wirral Waters said the building “has been a real symbol of the regeneration of the neighbourhood,” adding: “The first and second floors were let quickly following practical completion to innovative and growing businesses.
“Peel Waters have been successful in securing occupiers for more than 70% of the whole space. Following the option agreement, Wirral Council have gained control of the BREEAM Excellent Grade A office building that cost over £7m to build and is income producing.
“Rental and property values will undoubtedly grow over time as markets improve and the regeneration of the area continues. This will be accelerated if surrounding connectivity infrastructure comes forward in a timely fashion.”